Startup Takes Aggressive Stance on Raising Developer Salaries

Conventional wisdom in the hiring world says that money is not the best motivator for employees. Reality says that, if you’ve got the hot skill set, supply and demand will trump that wisdom any day. In Silicon Valley, ideas and VC pitches outnumber the quality software developers needed to complete the work, and salaries for those with the necessary skills are consequently rising.

To the consternation of many, though, those dev salaries might start rising even more quickly, as one entrepreneur applies a transparent and very aggressive pay scale to the developers he seeks in one of the most competitive markets.

CNET.com profiles in detail the plans of Weeby CEO and Co-Founder Michael Carter. The 29-year-old is well versed in both software development and financing, and all that experience has led him to an offer of $250,000 per year, or $1 million over four years, plus equity, for the small group of superstar developers he needs to launch his social gaming platform venture.

Carter says he plans to grow his 22-person team to around 40 employees, but needs to find the best of the best in Silicon Valley. His pitch to the developers he wants is the promise of making a real difference in a small shop, as opposed to being a small cog in a Google or Apple, and having a clearer view of the details of the high-end compensation and equity in the company. Clarity in those two benefits, he hopes, will prevent team members from feeling like they need to constantly be on the lookout for a better deal so they can cover that Valley mortgage or rent.

The number of people he can hire for Weeby is small, and the testing and evaluations for the positions are rigorous, but Carter is making peers who are searching for the same talent nervous. One incubator president calls the idea “horrific,” recommending that startups focus on finding excellent developers that will work for the love of the founder’s idea.

CNET also references Steve Jobs’ Next company, which famously made it known that it paid staff either $75,000 or $50,000, and was one “inspiration for the program,” according to the article.

While commenters on the article debate whether that salary structure was taking advantage of developers or empowering them, its transparency was a precursor to a trend that is gaining steam and fans among tech startups. It is not difficult to find many examples of tech startups sharing details about compensation. Fast Company, for example, profiled social sharing startup Buffer’s detailed salary formula earlier this year, and quotes the company’s CMO Leo Widrich as saying part of the reason for making the information public is to help other startups determine their own compensation plans.

Kachina Shaw is managing editor for IT Business Edge and has been writing and editing about IT and the business for 15 years. She writes about IT careers, management, technology trends and managing risk. Follow Kachina on Twitter @Kachina and on Google+

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